Cincinnati Insurance Company v. Howard Painting, Inc.; Auto-Owners Insurance Company; and Owners Insurance Company (Appeal from Jefferson Circuit Court: CV-20-900230).
SC-2023-0914
Ala.Mar 21, 2025Background
- JohnsonKreis Construction (general contractor) and Howard Painting (subcontractor) entered into a subcontract with an indemnity clause requiring Howard to indemnify JohnsonKreis for liabilities proportional to Howard's fault.
- An employee of a lower-tier subcontractor working under Howard was killed in a workplace accident at the project site. The deceased was using Howard's equipment and JohnsonKreis's telehandler at the time.
- The employee's estate sued both JohnsonKreis and Howard for wrongful death; JohnsonKreis and its insurer (CIC) settled claims against JohnsonKreis, while Howard and its insurer (Owners/Auto-Owners) settled separately.
- JohnsonKreis and CIC then sued Howard and Owners, arguing breach of the indemnity and insurance provisions, and seeking reimbursement for the settlement JohnsonKreis paid.
- The trial court granted summary judgment to Howard and Owners, holding that apportionment of liability in wrongful death actions is not permitted by Alabama law, making the indemnity provision unenforceable.
- JohnsonKreis and CIC appealed; the Supreme Court of Alabama reversed, finding the indemnity provision legally enforceable and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of proportional indemnity clause | Provision is valid under contract law and should be enforced | Alabama law bars apportionment of punitive wrongful-death damages, so indemnity is unenforceable | Enforceable; trial court erred |
| Duty to defend/indemnify under insurance policy | JohnsonKreis is additional insured; loss arose from Howard's work, so policy covers | Coverage not triggered; JohnsonKreis's own acts at fault; no duty to indemnify as per coverage | Not decided; remanded for trial court review |
| Breach of contract for nonpayment of settlement | Failure to cover settlement is breach; bad faith in denying coverage | No breach, as no duty existed under contract or law | Not reached due to reversal |
| Summary judgment was proper | All material facts resolve against JohnsonKreis; no enforceable contractual claim | Genuine issues exist, but apportionment rule forecloses claims | Reversed; material issues remain |
Key Cases Cited
- Tatum v. Schering Corp., 523 So. 2d 1042 (Ala. 1988) (bars common law indemnity and contribution among joint tortfeasors in wrongful death, unless altered by contract)
- Holcim (US), Inc. v. Ohio Cas. Ins. Co., 38 So. 3d 722 (Ala. 2009) (indemnity agreements between parties can alter general rules, if expressly stated)
- Mobile Infirmary Ass'n v. Quest Diagnostics Clinical Laboratories, Inc., 381 So. 3d 1133 (Ala. 2023) (upholds enforceability of contractual proportional indemnity)
- Parker Towing Co. v. Triangle Aggregates, Inc., 143 So. 3d 159 (Ala. 2013) (allows contribution/indemnity by contract)
- Industrial Tile, Inc. v. Stewart, 388 So. 2d 171 (Ala. 1980) (contractual indemnity can cover indemnitee's own fault where explicit)